Lecture on Internal Market Financial Services (part I) Flashcards
What year was the target of a common market in the treaty of rome?
1969 - it was not met
little progress in the 1970s
What paper proposed the completion of the internal market at the end of 1992?
White paper of Lord Cockfield (June 1985)
What are the 3 basic principles of White Paper and Single European Act?
- Minimum level of harmonization
- Mutual recognition
- Home country control
On which 3 freedoms is the internal market (1993) based:
- Free flow of capital movements (67-73 Treaty of Rome)
- Freedom to provide services (52-58 Treaty Of Rome)
- Freedom of establishment (59-66 Treaty of Rome)
When was the final directive for full liberalization of capital movements initiated?
June 1988
Which countries were excepted for the liberalization of capital movements until the end of 1992?
Spain, Portugal and Greece
When was the first banking coordination directive?
December 1977
What were the provisions concerns of the banking coordination directive?
- Definition of credit institution
- Authorization procedures
- Solvency and liquidity
- Cooperation between the supervisory authorities
What is the main goal of the second banking directive?
Creation of one single banking license valid in all EU member states
What did Basel II introduce?
Higher risk sensitivity of bank capital requirements
On what were directives of own funds and solvency ratio based?
Basel I accord
When do subsidiaries of non-EU banks become European Community enterprises?
They become European Community enterprises upon authorization in the EU.
What is the principle of reciprocal national treatment in the EU?
It’s the EU’s policy of treating subsidiaries of non-EU banks similarly to how those non-EU countries treat subsidiaries of EU banks within their jurisdictions.
How does absolute reciprocity differ from reciprocal national treatment?
Absolute reciprocity requires identical treatment in both jurisdictions, while reciprocal national treatment is based on the actual treatment, even if not identical.
What does “grandfathering” mean in the context of EU banking regulations?
It refers to the practice of allowing subsidiaries that were established under old regulations to continue operating under those regulations, even after new rules have been enacted.
